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- CORPORATE LONG TERM CARE POINT OF SALE PRESENTATION
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- The Last Great Tax Advantage
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- Long Term Care is assistance provided to someone who has a condition or
illness that limits his or her ability to perform normal daily
activities.
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- Assistance with Activities of Daily Living (ADL’s)
- - Bathing
- - Eating
- - Dressing
- - Toileting
- - Transferring
- - Continence
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- My Children Will Take Care of Me
- Medicare Pays for Long Term Care
- Medicaid Will Take Care of the Bill
- I Will Never Go to a Nursing Home
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10
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11
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12
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- Health Insurance Portability and Accountability Act
- Mostly aimed at Group Medical Insurance
- Revolutionized corporate executive benefit Long Term Care Insurance
sales
- Defined tax-deductible LTC Insurance premiums
- Defined amount of tax-free LTC benefits
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14
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- All reimbursement plan benefits are tax-free.
- All indemnity plan benefits spent on qualified nursing care are tax
free.
- Tax free benefits from an indemnity plan can exceed nursing care costs.
- However, indemnity benefits above nursing care expense AND above $220
(in 2003) per day (adjusted for inflation) are taxable.
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- The IRS has determined that Long Term Care, as an employee benefit, does
not have to follow ERISA guidelines.
This means that the employer can “pick and choose” who will
participate in this benefit program.(5)
- This benefit can create “Golden Handcuffs” for key employees and a
“Golden Parachute” for business owners.
- This benefit allows the Corporation to move business dollars into the
hands of key executives.
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- An employer may deduct 100% of premiums for employees that are not
owners of the business.
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- Tax qualified long term care insurance plans only
- Not eligible for cafeteria plans
- Eligible for MSA accounts
- Deduction limits
- Deductible amount is lesser of premium paid or age related amount
- 18-40 - $ 250
- 41-50 - $ 470
- 51-60 - $ 940
- 61-70 - $2510
- 71+ - $3130
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- C-Corporation
- 100% Deductible for all owners and employees
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- All Qualified Long Term Care Insurance premiums and expenses for
employees are fully deductible by employer without limitation.(8)
- Premiums not included in
W-2, even for owner-employee.(9)
- Benefits are not taxable(10)
- Employer can offer to select employees.(11)
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- Exceptional executive benefit
- Uses pre-tax corporate dollars
- Lower age - lower premiums
- Lower age - insurability is less concern
- Tax advantages not available individually
- Paid-up options fund post-retirement
- Endorsed Group premium discounts
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- LTCI cannot be part of a Section 125 plan(12)
- No C Corp cap on premiums that HIPAA did impose upon others(13)
- No C Corp limit on limited payment premium plans(14)
- Can be viewed as a way to increase executive retirement income
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- Limited-Pay Premium options
- Allows pre-payment of future premiums during specified period using
pre-tax dollars
- There is a high cost of waiting to buy
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- Lifetime Benefits
- 5% Compound Benefit Increase Rider
- $220 per day
- Indemnity Benefits
- Estate is protected by not having to liquidate estate assets in order to
pay for long term care.
- Comprehensive Benefits
- 10-Pay Premium Option
- Retirement income increases since you are not using retirement dollars
to pay for long term care
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- Tax Qualified
- 5% Compound Interest Inflation rider
- Comprehensive Nursing Facility Care and HCBC
- Indemnity benefit option
- 10-Pay and Single-pay premium options
- Underwriting related pricing advantage
- Lifetime elimination periods of 0, 30 and 90 days
- Joint Waiver of Premium
- Enhanced HCBC option
- Endorsed Group Premium Discounts
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Notes
